Council approves special legislative session on sales tax

The Executive Council on Wednesday agreed to call the special session to respond to the June 21 ruling that states can require online retailers to collect sales tax on purchases in states where they don’t have a physical presence. It was a victory for states losing billions of dollars in revenue every year but a potential blow to New Hampshire, which prides itself on having neither a sales nor income tax.

Lawmakers are working on legislation designed to protect the state’s businesses from the burden of becoming tax collectors for other states and jurisdictions.

“We are going to move quickly,” said Republican Gov. Chris Sununu, who requested the special session. “We are going to take a national lead in this process. The Supreme Court got this one wrong, and we’re going to make sure our businesses are protected.”

The council approved the request 4-1, with Democrat Andru Volinsky voting no and suggesting Sununu was pulling a political stunt. He said other states are unlikely to attempt to collect the taxes before the special session, which will be held by Aug. 15.

“There is no real direct need to do this special session before the other states act and we have of fuller understanding of what we need to react to,” he said.

Fellow Democrat Chris Pappas voted yes, though he said the special session also should be used to increase Medicaid reimbursement rates for mental health and recovery treatment centers. The centers were getting more money in the last few years because Medicaid recipients were on private insurance plans that paid more. But the state is switching to a managed care model with lower reimbursement rates set by the state.

“There’s a growing consensus that something has to be done to address the rate situation to ensure we continue to make progress on the mental health crisis and opioid crisis in our state,” he said.

Sununu agreed that something must be done, but said it’s possible the state could use some of the nearly $23 million in federal funding it is getting to fight the drug crisis.

“I think we have a real opportunity with the $23 million that’s coming in to help bridge that gap,” he said. “Before we just ask state taxpayers to fill in the gap, we have some grant money that might be able to do the job for us.

On the sales tax issue, lawmakers will consider requiring any jurisdiction seeking to collect sales taxes in New Hampshire to get approval from the state’s department of justice. Sununu also wants to authorize the attorney general to file expedited lawsuits against scofflaws. A joint legislative task force created to review the legislation will meet on Thursday.

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This story has been corrected to show the court ruling was June 21, not July 21.